View full sizeA comparison between Laclede's other operations and Alagasco. (The Laclede Group)

BIRMINGHAM, Alabama – Officials with the Laclede Group said its $1.6 billion purchase of Alagasco gives it greater geographic and regulatory diversity and puts it in a state where it sees opportunities to grow.

Suzanne Sitherwood, Laclede chief executive officer, said in a conference call this morning the cultures and operations of the two companies will be a natural fit.

“Alagasco is an excellent fit for Laclede, and allows us to leverage our combined scale, industry expertise and more than 150 years of experience to drive customer and shareholder value,” Sitherwood said in a release. “Now, with Alagasco, our utility customer base increases from approximately 1.13 million to 1.55 million.”

Sitherwood said Laclede will continue Alagasco’s efforts in its core business and in support of economic growth in the state. Alagasco currently has more than 422,000 customers.

View full sizeLaclede's geographic dispersion following its planned purchase of Alagasco. (The Laclede Group).

“We look forward to welcoming Alagasco’s customers and employees into the Laclede family, and to working with Alabama regulators, and state and local officials,” she said. “Laclede will ensure that Alagasco remains an active participant in advancing Alabama’s economic development efforts and supporting civic and charitable activities.”

Laclede said $260 million in tax benefits will make its actual cost in the deal approximately $1.34 billion.

The deal requires approval from the Alabama Public Service Commission and other federal regulatory approvals. The companies anticipate the deal will close this year.

On the conference call, Sitherwood noted she and other executives have experience working in Georgia and are familiar with Alagasco’s operations. She also pointed out that Craig Dowdy, Laclede’s senior vice president of external affairs, corporate communications and marketing, is an Auburn University graduate.

View full sizeAlagasco's earnings and operations impact when combined with other Laclede operations. (The Laclede Group).

Steve Lindsey, Laclede’s chief operating officer of distribution operations, said Alagasco is “a very well-run company” but he sees opportunities to grow at a faster rate than the company has grown under Energen.

Lindsey said Alagasco has averaged running just over 40 miles of new gas lines in the last few years and Laclede believes it can do more than that. There are also some municipal utilities and other providers not currently aligned with Alagasco that could be, he said.

Sitherwood said the deal was “a very competitive process” because Alagasco is “a high-caliber asset with a great management team in a great state,” so Laclede feels fortunate to be chosen among the potential suitors to buy Alagasco.